Samsung Electronics Co. has secured a $16.5 billion (22.8 trillion won) multi-year contract with Tesla Inc. to manufacture AI semiconductors, as announced on July 28, 2025.
Tesla and Samsung have reached an agreement that will enhance Samsung’s struggling foundry division, which faces stiff competition from Taiwan Semiconductor Manufacturing Co. (TSMC). Elon Musk, CEO of Tesla, confirmed on X that the Taylor, Texas, plant will start producing Tesla’s AI6 chip in 2026.
Bloomberg and Reuters reported that the contract, which extends through 2033, centres on Samsung’s upcoming facility in Texas, where the company will manufacture Tesla’s next-generation AI6 chips. Elon Musk confirmed the report in a post on X, stating, “Samsung will make Tesla AI chips in Texas.” This agreement comes after delays in Samsung’s Texas operations, which are now scheduled to begin in 2026 due to underutilised capacity. A spokesperson for Samsung declined to provide further comments, citing confidentiality.
Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate.
Samsung currently makes AI4.
TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.
— Elon Musk (@elonmusk) July 28, 2025Samsung’s foundry division has faced challenges, particularly with capacity utilisation issues that have led to a delay in Texas. According to TrendForce, Samsung’s global foundry market share decreased to 7.7% in Q1 2025, down from 8.1% in the previous quarter. Meanwhile, TSMC continued to hold a dominant position with a market share of 67.6%. Following this announcement, Samsung’s shares in Seoul rose by 5%, reaching their highest level since September 2025, as reported by Reuters.
This win counters Samsung’s setbacks, similar to Meta’s pivot from native apps, per The Verge. For Tesla, securing U.S.-based AI chip production aligns with Musk’s expansion plans.
The deal highlights U.S.-China tensions in tech manufacturing, with Samsung investing $17 billion in Texas, supported by incentives. It could boost Samsung’s revenue, estimated at $77 billion in 2025, per Statista. Samsung’s Tesla deal revives its foundry ambitions. The Texas plant’s role in AI chip production signals strategic growth amid competition.
 multi-year contract with Tesla Inc. to manufacture AI semiconductors, with details explained.){kind=link}